If you own a business, succession planning is essential. Without a clear plan, your business could be left in limbo, your family could face financial hardship, and years of hard work could be lost.
The first step is understanding what happens to your business interests when you die. Sole traders' businesses form part of their estate and are dealt with under their Will or intestacy rules. Partnership interests are governed by the partnership agreement. Company shares pass according to the articles of association and your Will.
Business Property Relief (BPR) can significantly reduce the IHT liability on business assets. In 2026, qualifying businesses benefit from 100% BPR on the first £1 million of combined BPR and APR-eligible assets, and 50% relief on amounts above this threshold.
A cross-option agreement (for partnerships and companies with multiple shareholders) ensures that if one owner dies, the surviving owners can buy their share at a fair price, while the deceased's family receives fair value rather than a minority shareholding.
Key-person insurance can protect your business from the financial impact of losing a crucial individual. The payout provides funds to recruit a replacement, cover lost revenue, and maintain business stability.
Don't forget your business LPA. A Property & Financial Affairs LPA can include authority for your attorneys to manage your business interests if you lose mental capacity. Without this, your business could be left without anyone authorised to make decisions.
At Castle Family Legal, we work with business owners to create comprehensive succession plans. Contact us to protect your business legacy.
